Gold Kist accepts an extra dollar per share
Pilgrim's Pride and Gold Kist have announced that the
two companies have entered into a definitive merger agreement under which
Pilgrim's Pride will acquire all of the outstanding shares of Gold Kist common
stock for US$21.00 per share in cash.
The transaction, which is valued at US$1.1 billion (plus the assumption of
approximately US$144 million of Gold Kist's debt), will result in the creation
of the world's largest chicken producer.
Gold Kist board members finally agreed
to the sweetened deal of $21 per share, after rejecting Pilgrim's Pride's original
offer of $20 per share
"After careful consideration,
the special committee of independent directors, as well as our entire board,
determined that the Pilgrim's Pride enhanced offer is in the best interests of
our shareholders, employees, growers and customers," said AD Frazier, chairman
of Gold Kist.
"This is a momentous
day for both companies and for the chicken industry," said Lonnie "Bo" Pilgrim,
chairman of Pilgrim's Pride. "We believe the combination of these two great
companies will result in substantial value creation for our respective
stockholders, employees, business partners and other constituencies."
Goolsby Jr, Pilgrim's Pride president and chief executive officer added: "We are
excited about the opportunity to begin realising the substantial benefits that
will result from the combination between Pilgrim's Pride and Gold Kist. The
combined company will be well-positioned to provide even better service to its
Pilgrim's Pride expects to achieve approximately US$50 million in savings
each year, primarily from the optimisation of production and distribution
facilities and cost savings in purchasing, production, logistics and
The Pilgrim's Pride offer represents an
approximately 62% premium over Gold Kist's closing stock price on 18 August
2006, the last day of trading before Pilgrim's Pride notified Gold Kist's board
of directors in a public letter that it was offering to purchase the
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